Fraud ef­forts hurt by IT woes

The CMS is run­ning years be­hind sched­ule in in­cor­po­rat­ing Med­i­caid claims and other trans­ac­tion data into its lat­est suite of fraud-fight­ing tools—a de­lay that is at­tract­ing some un­wel­come po­lit­i­cal at­ten­tion amid the deficit­slash­ing zeal on Capi­tol Hill.

The fed­eral agency has spent at least $161 mil­lion rolling out two new sys­tems in an ef­fort to cut into the $70 bil­lion that HHS es­ti­mates was lost to fraud and ac­ci­den­tal over­pay­ments in Medi­care and Med­i­caid in 2010.

The new sys­tems were ex­pected to save the fed­eral trea­sury $21 bil­lion over 10 years by cut­ting the im­proper pay­ments.

But a 50-page re­port re­leased last week by the Gov­ern­ment Accountability Of­fice chided the CMS for its ap­par­ent sloth in de­ploy­ing the two sys­tems—the In­te­grated Data Repos­i­tory and the One Pro­gram In­tegrity ini­tia­tive.

“The GAO is not off base,” said Barry John­son, pres­i­dent of Salt Lake City-based Health­care In­sight, a pri­vate firm that does pre-pay­ment in­surance claims re­views. CMS of­fi­cials “talk about do­ing all these things and you get ex­cited for change,” he said. “And here we are a year and half later, and they’ve trained 40 peo­ple.”

GAO au­di­tors said that only 42 of 639 con­trac­tors who were sup­posed to be trained on the pro­gram by 2010 ac­tu­ally had been, and that the state-based Med­i­caid data that was sup­posed to en­ter the sys­tems in 2010 is now on track for en­try in 2014. And since no bench­marks for per­for­mance had been set, it was im­pos­si­ble to tell whether the pro­grams had saved any money, let alone some frac­tion of the $21 bil­lion.

In writ­ten re­marks and tes­ti­mony to a con­gres­sional com­mit­tee, Joel Willemssen—the man­ag­ing di­rec­tor of in­for­ma­tion tech­nol­ogy for the GAO—went so far as to com­pare the CMS’ cur­rent ef­forts to cen­tral­ize its Med­i­caid claims to the Medi­care Trans­ac­tion Sys­tem of the 1990s.

The CMS spent more than $100 mil­lion on the trans­ac­tion sys­tem in the mid-90s, af­ter say­ing it would cost only $37 mil­lion. Congress voted to can­cel all fu­ture fund­ing, caus­ing the CMS to per­ma­nently shelve the pro­gram, af­ter the GAO pre­dicted the ultimate price tag could rise to more than $1 bil­lion (Sept. 22, 1997, p. 26).

“There are sim­i­lar­i­ties and there are dif­fer­ences,” Willemssen said, com­par­ing the fail­ure of the trans­ac­tion sys­tem with the CMS’ cur­rent pro­grams, in July 12 tes­ti­mony be­fore the Se­nate Sub­com­mit­tee on Fed­eral Fi­nan­cial Man­age­ment, Gov­ern­ment In­for­ma­tion, Fed­eral Ser­vices and In­ter­na­tional Se­cu­rity. “One area of sim­i­lar­ity is